Short Put Strategy on Dividend Domination

Below you will see full details on this strategy that is now available in the Brutus Options Ranker.

You can easily clone this template into your account. After cloning the strategy, you can customize it to your liking and re-weight the criteria to match your trading objectives.

Dividend Domination

Dividend Domination

Short Puts

Short Puts

Short Put Strategy on Dividend Dominators Weight to Customize

By OptionAutomator

This is a great full strategy that looks to write short puts on great dividend paying stocks. This allows the trader to collect premiums as well as dividends in the event they get assigned the underlying stock.

Template type :

Personalize Weighting on Pre-Built Strategy

Template objective :

This strategy looks to sell either naked or cash-secured puts on high performing dividend stocks. This is a fairly conservative strategy, as the assignment risk taken by the trader allows the trader to pick up the stock at a discounted price and therefore increase dividend yield, provided the dividend payout remains constant.

Assumption :

Slightly Bullish

Event Driven :

Event Neutral

Net short or net long options :

Short Options Strategy (credit is collected at entry)

Compatible setups :

This strategy is designed around short put selling.

Suggested market groups :

Use this strategy with high dividend-paying stocks:
1. Dividend Aristocrats
2. Dividend Domination

Prerequisites :

The trader should be familiar with short put selling. Check the "view details" on the put selling setup for more information.

When to take profits :

A good rule of thumb is to take profits at 50% of the credit received. E.g., if the put is sold for $1.00 then the trader may buy back the short put(s) at $0.50.
A variation is when the trader is comfortable to take the stock if assigned due to the higher yield. In this case, the trader should hold the position to expiration for a potential max profit.

Managing a losing trade :

This strategy works well with a 'down and out' trade management strategy. Alternatively, the trader may choose to hold to expiration and take the assigned stock at a reduced cost basis.

By using this site, you acknowledge that you have reviewed the Terms & Conditions, Informational Services Agreement and Privacy Policy on the legal page of this website and agree to all therein.

None of OptionAutomator LLC, any Personality featured on our site, application, or in the Content, nor any of OptionAutomator’s members, managers, employees, representatives, agents or independent contractors is, in such capacities, registered investment advisers, licensed financial advisors, or registered broker-dealers. They do not provide investment or financial advice and they do not make investment recommendations. The trades screened by the Software do not constitute solicitations, recommendations, promotions, endorsements or offers by the individuals featured on OptionAutomator or OptionAutomator itself. You may download the Options Disclosure via link in the following paragraph.
BRUTUS OPTIONS RANKER applies Multi-Criteria Decision Making mathematics to establish your trading criteria and then ranks potential options trades against the criteria set by the User in the account. None of the people associated with OptionAutomator, nor OptionAutomator, guarantees any particular results or profits from the trades, nor provide guarantee to the accuracy and availability of the software. The risk of loss in trading securities, including options and equities, is substantial. There is a risk of loss in all trading and investment strategies and opportunities that are discussed on OptionAutomator Website, Content, Software, or Public Forums.
When trading options, you may lose more than your initial investment. Options trading is not suitable for all investors. It is the responsibility of the user to review and agree with the Options Disclosure document: Characteristics and Risks of Standardized Options. The trades, public templates and strategies may not be suitable for you and do not take into account your particular financial situation or your investment objectives. None of the trades are being recommended to you nor contain any guarantee of accuracy. The trades are for informational purposes. Before engaging in any trading based on any information you receive from the Website, Content, Software, or people associated with OptionAutomator or other users, you should determine whether the trades are suitable for your circumstances. If you are unsure about how trades you may make will affect your overall financial portfolio or the level of risk that is involved, you may want to consult with your financial adviser prior to entering any position.